February 22, 2022

How to Write Off Rental Property Expenses

1 hour 3 minutes

Oh, you did what? I can't believe you did that! Call me next time. Accountants and attorneys could have saved you money. You, too, can annoy and laugh at others at family and social gatherings and parties.

In this episode of Tax Tuesday, Toby Mathis and Jeff Webb of Anderson Advisors discuss how to write off rental property expenses, as well as answer additional tax-related questions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

Can losses from real estate syndications be taken against active income if you or your spouse are real estate professionals, or is there more criteria? Real estate syndications are treated pretty much the same way that any other type of real estate property would be that's for rent. If you do a cost segregation, you have accelerated depreciation. You can deduct stuff as a real estate professional that you may not be able to deduct as just somebody investing in real estate.

Can I owner finance or lease purchase a property that currently has a mortgage on my personal name and the deed is titled on my LLC? Yes, you could do this as a Subject 2. They're not taking over the mortgage, they're buying it subject to the existing mortgage.

Trying to buy a short-term rental. If I sign for the loan personally and title the property in an LLC, would that be considered co-mingling personal assets with LLC to break the corporate veil? No, that doesn't really break the corporate veil, but you should keep the transactions as separate as possible. If you're just buying the property and then transferring it to the LLC, that's not a big deal.

Can I start filing taxes for LLCs I created for two of my rental homes, even though the real property deeds have not yet been transferred/filed/recorded to said LLCs? It depends on how the LLC is being taxed. If they're disregarded to you personally, report them on your 1040. If it's going through an entity, they're not titled to that entity, that's more problematic. You still have to file the taxes.

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Resources:

The Build Back Better Framework

https://www.whitehouse.gov/build-back-better/

Tax Cuts and Jobs Act

https://www.irs.gov/tax-reform

MileIQ

https://mileiq.com/

Uniform Gifts to Minors Act (UGMA)

https://www.investopedia.com/terms/u/ugma.asp

Toby Mathis